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Plan for the long game and be prepared to go through some months of pain. Have a great network of professionals to assist you.
You heatmap apps that tie into a good “ funding calculator” provided by your lender.
And for goodness sake make sure you understand all of the fine print before committing.
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I'd suggest Trump University.
But for some reason or other, they're no longer offering classes.
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I've been doing it forever. The game has changed...still a lot of good opportunities out there. It depends on your goals and expectations.
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Buy at a low price and sell at a high price.
There "OP" now you know it all.
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my goal was to always pair a 500k-plus/yr h0000k and a contractor together...married if possible, but not necessary. when they made personal residence gains virtually tax free in '97....it was a potential master plan that needed the appropriate players.
had a few close to the million range yearly, but too frigging stupid and didn't want to pay any taxes...so they had to GO
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Renters not paying their rent, might be a problem for a newb.
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can be brutal...seen a few shit their pants a few times...new to the business and big portion of rentals turned into alligators at one point or another
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Buy a high quality low cost REIT and let it ride.
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1) The first thing I would do if just starting out, and did do when I first moved to Austin, is get a detailed map of the zip codes your looking to invest in or the whole area you're in so you can familiarize yourself with the area. You've really got to be familiar with the area/s your going to invest in.
2) Go through each zip code, learning the areas in each zip code. While learning the areas also learn what the potential ARV's, after remodel values, are in each area.
3) While learning the areas also start lining up potential 'private lenders'. These are people who have disposable income and who might be interested in a short term investment in your project - since you're a new investor you may have to offer a higher return such as an APR of 12 - 14% = 1 - 1.7% per month for every month that you are using their money. You can secure their loan with a 'deed of trust' drawn up by a real estate attorney and then have them record it with the county, this protects them and you. Also make sure that in the lending doc you have it specified that they will be getting both the interest and principle AT CLOSE OF ESCROW!
As a side note - If you have a project that loses money: RETURN THEIR PRINCIPAL INVESTMENT!!! and take the loss. It will increase their trust and credibility in you but more importantly IT'S THE RIGHT THING TO DO.
4) Also start searching for 'hard money' lenders - Yes you'll have to pay a higher interest rate but they can fund a loan quicker then traditional banks and the loan requirements are much easier than a bank's, the ones I use fund within 5 days @ 70% of ARV. After you've secured the property you can refi it with the bank.
5) Get on the MLS! If you know a realtor talk to them about what your trying to do, what kind of properties your looking for, what condition etc. Ask them if they'd be willing to give you access to the MLS if you'll make them your 'realtor of choice' to resell the projects.
Also negotiate what their commission they'll get for selling your projects. Remember you're giving them repeat business so you should get a commission break - You only get what you negotiate.
If they're not open to that - ask them if you can become an 'unpaid assistant' in exchange for access.
6) Start going to meetings of investment groups - Check out 'meetup.com'. Talk to the investors there, they're always willing to help AND you may find someone willing to be a mentor.
Also check out your local REA
7) When you find a property ACT QUICKLY! There's A LOT of competition so you have to act VERY quickly.
8) IT'S OKAY TO WALK AWAY! If you've put in an offer make sure you get an option period of at least 10 days, pay them $25/day, then inspect the property closely! ALWAYS bring in a plumber to check the underslab/under house main sewer lines! If they're bad and you buy it without renegotiating you're responsible for fixing them! and it WILL be VERY expensive!
If the seller won't come down in their price after you find major issues like structural, plumbing, electrical etc. WALK AWAY! That's what the option period is for.
That's my $0.02
Atticus Finch
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If you want to flip real estate in so cal and don't have 1M available to fund yourself, the best opportunities can be found in San Bernardino...in the mountains.
The RE market is hot up there for turnkey homes but there are still great deals available for fixer uppers. Get you a builder that is familiar with building in the mountain. Find yourself a LOCAL real estate agent up there and have them show you around. Just lead them on like you want to buy for your family or some wholesome shit. They will show you around and teach you about good areas for families and get you acquainted with the lay out.
Mean time, get your own RE license so you don't have to pay any extra commissions out.
In 2 months, when the snow finally melts and people start buying up there again, you'll be ready to find a good property at around 250-265k. You put 10-15k into the refurb costs and you can list it for 300k. Stay in the same neighborhood and buy another and by the time you get to the 3rd prop, you alone will have pushed the price in the neighborhood up by 20-30k and you can start making 50K on the flips.
But what do I know...I've only seen it done for the past year. A buddy bought 3 homes in Feb 2020 for about 450k total and made about 300k on the flips. He had a good 2020 and just bought another to work on in 2021.
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OP read the 2 comments above from AF and Callvan. Good info!
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All good info, not for the faint of heart and if you have no experience it's a tough one to break into and make money. Key will be your contractor who can make or break you, try to make them your partner and cut them in on a share of profits. Of course they have to be licensed so they do quality work.
Good luck.
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So I'll try not to repeat what has been said.
-Real Estate investing is hands-on. At times, you will need to be physically involved. Get ready for that.
- I would look at this as a long term investment. Flipping a home in 1 year or less and making it profitable can be very tricky.
-Dealing with renters can be a headache. For example, I had to kick out my renters after I found out they were subleasing my property to another family. There were maybe 15 people in a single family home! Hope for the best, but plan for the worst.
- This was said already, but having cash for your investment is key to success. You don't want to let your investment deteriorate because your short on funds. Unfortunately, CA is expensive!
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It is a great opportunity if you have "patient capital". I have been doing it for 35+ years in an array of positions. So Calif is very expensive and returns are very thin and can evaporate in the blink of an eye. Definitely hands on profession and that is how you need to approach it. Nobody can dabble in RE Investing unless it is by purchasing shares in a REIT. You have to have a clear picture of what your plan is. Are you ok with limited cash flow in the near term or is generating passive income a key.
Covid has definitely brought numerous challenges to maintaining occupancies and collecting rents and evicting tenants. Also because of COVID while rates are at historical lows the underwriting can be challenging if you are thinly capitalized. Consider the friends and family idea if you are all aligned with the same goals to at least get started. There may deals where and owner wants to sell but wants to get cash flow so there may be opportunities to have the seller "carryback" the loan which simplifies the loan process. This may be a chance to get your foot in the door.
Don't invest in a market or property that you don't know or fully understand.
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learn the ins and outs of the 1031 exchange and get someone good to handle it for you.
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If you want a methodical way of investing to flip, I recommend doing the following:
1. You need to know as much information about the area that you're interested in. Look at how fast things sell (based on number of days on the market), if houses are being sold above asking in an area, etc., to determine how desirable the area is and how quickly you'll be able to sell the house you want to flip once you're done fixing it up. There's no point to flipping a house in an area where there is no demand.
2. The general rule is to buy the worst house in the best area you can afford (while factoring in rehab costs);
3. Residential properties are generally priced on a price-per-square-foot basis; if you can easily add a room to the house, then you'll automatically increases its value (minus the construction costs); it's all simple math.
4. Before making an offer, tour the house with a contractor and see how much things would cost OR take a lot of pictures and ask a contractor how much it would cost to refinish cabinets in the kitchen, do tile work, etc.
5. Before anything else, determine how much money you have to play with and what loans you qualify for. Get a pre-approval letter from a bank as to how much of a loan you qualify for.
I recommend putting the least amount down and using the bank's money as much as possible (since interest rates are so low).
Don't think about what you like in a house, but what you know would sell in a particular area. Namely, a neighborhood with families requires at least 2 baths. A house with a view requires mostly windows. Etc.
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Wow, some excellent pointers here. Thanks to everyone who has commented so far. I knew there were some successful RE people in here 
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@ ronan
Got your DM but don't have mail privileges at the moment so answering your question here:
3) Also make sure that in the lending doc you have it specified that they will be getting both the interest and principle AT CLOSE OF ESCROW!
What I mean by this is: In the lending doc/contract you and your private lender sign for the loan make sure it's specified that you will be repaying the principle of the loan i.e. the amount you borrowed AND the accrued interest on the loan (if it took you 10 weeks = 2.5 months to finish and you both agreed to a 12% APR = 1%/month then you would owe them 3.5% at close of escrow - 2.5% covers remod time, 1% covers time it was in escrow - 30 days typically) when the house sells i.e. at close of escrow when the money gets distributed.
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Another point that new investors should know -
9) If you're doing a residential remodel i.e. a single family house, it should take AT MOST 3-4 months from start to finish! Anything longer will eat up your profits in holding cost payments - loan payments, utilities etc.
A good rule of thumb: you should be spending approx. $10k/week on the project.
Ex.: A project with an $80k remodel budget should take you around 8 weeks, 2 months, from the time you start to the time you finish and put it on the market a $100k remod 10 weeks etc.
That's if you've done your due diligence and no surprises happen, which they usually do, SO, I usually pad my time table by a week or 2 and ALSO pad my remod budget by $10k+ for 'contingencies'.
Commercial projects usually take 1 - 2 years from start to finish - bigger rewards but also bigger risks. This varies on the size of the project and if it's a 'new build' or remodel, of course.
10) If you don't have a construction background, or even if you do - I wouldn't recommend hiring a general contractor - hire a project manager, the best are retired Journeyman Carpenters - they know both structural AND cosmetic.
Why? Unless the contractor has his own crew he'll be bringing in subs. Each sub will have to make at least a 10% profit. Top that off with the general ALSO making at least a 15% profit and you're spending needlessly AND all he'll be doing is managing the project. You can hire a PM for around $35 - $45/hour and they only have to be on site 3-4 times a week for 4 - 6 hours/day at most.
Another advantage if you hire a PM, you or your PM, can 'interview' the subs AND negotiate their bid - 'I'm going to be doing several of these a year and I'm looking for people that will do good work at a reasonable price so I can use them on all my projects' or something like that.
Also - NEVER EVER give money up front to a sub or general!!! In California it's actually illegal. Instead set up a 'Draw Schedule' - 'After you get so much done you'll get 25% of your bid etc' and split the draw schedule up between Rough & Finish. Giving money up front is a great way to see your money fly away. A lot of contractors/subs use 'up front' money to fund their other projects! SO DON'T DO IT! If the contractor/sub won't do it without up front money MOVE ON! Contractors are like buses - there's always another one coming down the line. Too, after using a plumber, electrician etc a few times EXPECT them to start raising their prices/bids so have others you can call when that happens AND ALWAYS get at least 3 bids to keep your guys honest. Also have your subs split their bids into 'Labor' & 'Material' so you'll know what's what. Too you can see if you can't get the material at a cheaper price then they can since they're probably padding the material costs.
11) Do as little of the work as you possibly can. If you're working on the project you AREN'T looking for more projects.
Here's your job as an investor:
Finding projects & finding money.
12) Lastly - this is hard work!, believe it or not. I work 7 days a week and usually 12-14 hours/day. So don't think it's an easy gig.
Atticus Finch
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And Lastly..... How much did you pay for this advice? That's how much it's worth.....
Now go forth and multiple!
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To add to Atticus_Finch last comment.
When you do not hire a licensed contractor, you will need to hire licensed subs instead. If the work is Life Safety work you are required to have licensed individuals anyway, since this is CA State Law. The licensed sub also protects you because they have to be bonded. The most important reason for licensed subs, is if they are not licensed and they are working for you, they are then your employees, even if they have a business card. That means you need workman's comp for them. If they are not licensed and they get hurt on your project you are liable for their injury, which can wipe you out.
A lot of people think that if they are working on their own home that these rules do not apply, but they do. Over the years the building departments have been cracking down on owner builders. That only applies if you are doing the work on the place you are living at. If it is a rental this does not apply. They also warn homeowners of the potential insurance risk. You can go to the CA State Licensing Board website to verify if the trade person you are hiring is licensed.
I am not in the flipping business. I know this because I am a licensed architect. If the work is Life Safety (electrical, mechanical, and plumbing) work you will need to get a permit for that, but your licensed sub can usually get a permit over the counter for the work he is going to perform.
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@ juniorcalon
Posts like yours discourage people from helping others.
While I may not agree with his politics, it is clear that Atticus Finch knows what he’s talking about and his advice is quite valuable, especially if you plan on using hard money lenders.
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^ Man my politics aren't that bad. 
I actually consider myself a JFK liberal, course now a days I guess JFK would be considered conservative. So call me a center left with common sense.
One last thing -
13a) Copy! Find out what other successful investors are doing - how they do their projects, how they're raising money and how and who they're marketing to - and copy it!
Figure out how you can adapt it to your needs. Keep what works and discard what doesn't.
This isn't rocket science and there's no need to reinvent the wheel so copy stuff that works for others.
That's it I'm done and off work.
Atticus Finch
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As for rental property investments if that is your goal, I suggest you take a hard look at California AB15 - Covid-19 releif: Tenancy: Tenant Stabilization Act of 2021.
This bill extends unpaid rent or any other unpaid obligation of a tenant that came due between 1 March 2020 and 31 December 2021. The repeal date of this bill extends to 1 January 2026, so for the next 5 years, landlords are totally fucked from collecting past due rent.
This bill clearly targets small investors and mom-and-pop landlords who could lose their properties. The state of California - via state mandated local programs in this bill - gives the state of California the first right of refusal if the property goes into foreclosure. Otherwords, the state can just gobble up these foreclosed properties at their discretion.
Just saying, ya'll better get off your asses and sign the petition to recall Newsome if you have residential real estate investments in California.
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Most of you will buy at the top, then get crushed
I will happily pick up the pieces later
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AF...that's exactly what I tell cam girls...we don't need to be inventing any wheels here to be successful and build a budding lil business...lots and lots of examples of girls killing it online...spend 30hrs just watching before starting up
it applies to most everything btw
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@ mark1224 when ever I do anything in California, new builds or remodels, I do it as an 'Owner builder', BUT a lot of building departments are now making it so you have to prove that you are 'qualified' by showing that you were - a minimum 3 year journeyman in a trade or something comparable. I just give them both my contractors and engineers license numbers so for me its not a big deal.
The point is - if you don't know anything about building I wouldn't recommend doing anything owner builder unless you've got a good PM. Depending on inspectors doesn't work cause most of them are idiots.
Atticus Finch
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